Efficiency in repeated games with local interaction and uncertain local monitoring

Francesco Nava, Michele Piccione

The paper discusses community enforcement in infinitely repeated, two-action games with local interaction and uncertain monitoring. Each player interacts with and observes only a fixed set of opponents, of whom he is privately informed. The main result shows that when beliefs about the monitoring structure have full support, efficiency can be sustained with sequential equilibria that are independent of the players' beliefs. Stronger results are obtained when only acyclic monitoring structures are allowed or players have unit discount rates. These equilibria satisfy numerous robustness properties.

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Year of publication:	January 2014
Authors:	Nava, Francesco ; Piccione, Michele
Published in:	Theoretical economics : TE ; an open access journal in economic theory. - Toronto : [Verlag nicht ermittelbar], ISSN 1555-7561, ZDB-ID 2220447-7. - Vol. 9.2014, 1, p. 279-312
Subject:	Local monitoring \| repeated games \| cooperation \| networks \| Wiederholte Spiele \| Repeated games \| Spieltheorie \| Game theory